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European Central Bank wary of Greek bailout plan: Financial Times

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The European Central Bank is unwilling to approve Greece's proposal to sell short-term Treasury bills worth 10 billion euros (US$11.49 billion) to tide over the debt-ridden country for the next three months, the Financial Times reported on Tuesday.

[LONDON] The European Central Bank is unwilling to approve Greece's proposal to sell short-term Treasury bills worth 10 billion euros (US$11.49 billion) to tide over the debt-ridden country for the next three months, the Financial Times reported on Tuesday.

Citing people familiar with the matter, the FT quoted one Eurozone official as saying the ECB "will play hardball" on raising a 15 billion euros ceiling for the T-bill issuance, which is essential for the Greek bailout plan.

Without the financing, Greece will exit the programme, which has been in effect since May 2010, and might run out of cash within weeks, the newspaper reported on its website.

Greece's new leftist government has made it clear it wants to end the existing arrangement with the European Union, the European Central Bank and International Monetary Fund "troika" when its aid deadline expires on Feb 28.

The victory of the anti-bailout Syriza party has sparked worries about the country's future in the euro zone if the rescue programme ends.

If Greece does pull out, banks in the country would no longer be able to use the ECB's normal funding operations in any meaningful way, leaving emergency liquidity assistance, which is more expensive and requires regular reappraisal, as the only option.

Representatives at the European Central Bank could not be reached for comment outside regular business hours.

REUTERS